The recent conflict in the Gulf region, particularly the shutdown of the Strait of Hormuz, has severely disrupted the supply of conventional nitrogen fertilizers, particularly urea, which accounts for about a third of global trade. This disruption has led to multi-year high price surges for fertilizers, forcing farmers worldwide to seek alternative solutions ahead of the fall planting season. Without these alternatives, farmers face risks of lower yields, financial losses, and widespread disruptions to the global food supply chain. The World Bank anticipates a nearly one-third increase in fertilizer prices this year, pushing affordability to its lowest point since 2022.
In response to this crisis, farmers are turning to both age-old practices and new technologies. For example, English farmer James Mills has switched to chicken manure, which is now in high demand with long waiting lists. French startup Toopi Organics, which processes human urine into a bacteria-rich plant feed, has seen its sales jump by approximately 25% since February, with prices remaining stable due to abundant supply. Similarly, Malaysian dairy producer Farm Fresh is intensifying its use of livestock waste to feed worms, enriching the grass for its cows as urea costs climb. Other innovative solutions include the use of ground almond shells by California-based Nitricity.
Companies that offer biological and alternative fertilizers are experiencing a surge in demand. Pivot Bio, a firm backed by Bill Gates' ventures and having secured around $700 million in funding, cut its prices by about 15% early in the conflict, giving it a significant cost advantage over conventional fertilizers. This has enabled the company to introduce its products to more U.S. farmers, with its offerings potentially reducing fertilizer use by up to 50% and cutting costs by approximately 20%. Despite this, a major challenge for these startups is scaling up production to meet the sudden increase in demand, with companies like Toopi needing to boost urine collection and Nitricity sold out through 2028. The crisis is also accelerating interest in products from established companies like Syngenta and startups such as Living Roots and Holganix. While these alternatives offer promising solutions, the long-term question remains whether demand will persist once supply chain issues normalize, as synthetic nitrogen fertilizers, produced largely from natural gas, have been foundational to global food production for decades and are difficult to replace at scale, with no "silver bullets" identified to completely maintain current yields without them.
